Gary Community School Corp.'s finances are in such disarray it's difficult to determine where to begin to get the district's financial house in order.
A consultant hired to advise the district, at the behest of Indiana's Distressed Unit Appeals Board, persuaded the state to give the district a $15 million loan, interest-free, to start whittling down debt.
That loan should be considered leverage, not a gift.
The district must be forced to meet certain benchmarks, to be determined, to make sure progress is being made.
We recognize these problems built up over time, under a succession of superintendents, but they must be resolved in relatively short order so money and attention are freed up for improving student instruction.
The financial hole the district finds itself in is so deep it's difficult to see the light at the top.
The debts include more than $7.1 million in taxes and interest due the Internal Revenue Service, $4.15 million owed to NIPSCO, $730,000 owed to AT&T, about $1 million to Illinois Central Bus Co., and $440,000 owed to the Gary Sanitary District. That's on top of all the usual debt for capital spending school districts routinely incur.
The debt consolidation plan proposed by Jack Martin, a Michigan-based financial turnaround specialist, would be a relief to the vendors and the IRS. But it also gives the state additional leverage to require the district to stabilize itself.
Enrollment has dropped by more than 1,000 students since last fall. It's now at 5,947, said school spokeswoman Charmella Greer.
The biennial budget approved by legislators last spring means Gary Community School Corp. is projected to lose $9 million over the next two years.
A September audit by the Indiana State Board of Accounts said it couldn't determine if the district's spending reports and balances were accurate.
The financial ship must be righted quickly.
It's not just a matter of ceasing spending on some items and accounting for its spending appropriately. The district also needs to make smart investments to provide proper facilities for its students and to improve instruction.
In five of the last six years, Gary Community School Corp. has been given an F on the A-F accountability scale, according to the Indiana Department of Education. In 2010, it was a D.
With poor facilities, and even worse ratings, the district will continue to lose students to competitors. The district's performance standards attached to that loan must include incremental improvements in student test scores, individual school accountability ratings and the district's overall rating.
The school district's problems have built up over decades, but that's no comfort to the parents of students not receiving the quality of education they deserve.